What is Commercial Crime Insurance Coverage?


A commercial crime insurance is a policy which offers comprehensive cover and provides protection against employees’ theft and any losses from forgery, computer fraud, etc. In the event of any commercial crime, it becomes the duty of the insurance company to safeguard the policyholder against various losses or damages.


Undeniably, you can’t ignore white collar crime which is rising at an alarming rate. Many times, companies don’t think of purchasing the cover against fraud. However, the reality is that it’s more the senior staff and trusted employees that commit fraudulent activities. And when they strike, they do it not for once but again and again over a period of time.


As a company, it becomes necessary for you to have a viable financial coverage instead of wishful thinking, to get protection against such fraudulent activities. Here, commercial crime insurance policy can play an important role.


Here are the coverages which are available with a commercial crime insurance policy=


Employee theft Cover= It includes loss of securities, money or other property by theft or forgery by the employee of the company.


Premise Cover= It includes losses from destruction, wrongful abstraction, theft of securities or money from the policyholder’s premises by third-parties.


Transit Cover= It comprises of losses from disappearance, destruction of money or security outside the policyholder’s premise by a third-party.


Depositors Forgery Coverage: It includes losses or damages which arise due to losses from instruments like cheques which are fraudulently drawn by a third-party on account of the policyholder


Computer Fraud Coverage: It comprises of losses which a policyholder has to endure due to computer fraud made by third-party along with the expenses which the policyholder has to incur due to a violation of computer.


In most of the cases, commercial crime insurance policy comes with a deductible clause which states that at the time of loss, a part of the claim would require being paid by the policyholder. The insurance company would pay the remaining amount. Further, most of the insurance companies allow customizing commercial crime insurance policy to cover various fraud-related losses as per the company’s specific requirements.


The insurance policy also helps by covering the additional costs which a policyholder incurs at the time of loss or damage. For instance, after the commercial crime, the policyholder may require a temporary replacement of equipments or temporary workforce or office space. Similarly, additional expenses may be spent by the company in transporting of documents or equipments. Here, the insurance company may pay the additional cost along with the additional cost incurred in bringing the external workforce on board.




KS Automobile Spare Parts was situated in Pune. Backed with over 100 employees, the company had a huge clientele base both in India and abroad. Last year, the company got a big contract of exporting spare parts worth Rs 2 crore to a buyer situated in Dubai. Considering the quanturn of the order, employees were working in double shifts.


One day, a worker named Kishore was working in night shift. During the break when a few employees were outside the site, he took an undue advantage of the situation and stole ten packets of spare parts which were to be included in the part of the exporting order.


However, Kishore’s crime was captured on CCTV which was installed there. Though the company recovered the packets of spare parts were found; they were in bad condition.


The act of Kishore caused heavy losses to KS Automobile, who had to employ extra employees to manufacture spare parts which got damaged during the theft. It was an additional cost that the company had incurred. The entire incident made the management of K.S Automobile to think what could have been done to avoid the situation.




The situation would have been different if KS Automobile had a commercial crime insurance. The insurer would have come forward to cover the losses which the company had to incur due to theft committed by its employee. Further, as K.S Automobile had to pay extra to get additional workforce, the cost associated with it would have been covered by the insurance company as well.

Source: Secure Now


Share on social media